Basics Of Engineering Economy
Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 4, Problem 39P

a:

To determine

Select the project.

b:

To determine

New selection of the project.

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oncurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, has recommended that a 2 -year-old piece of precision measurement equipment be replaced immediately. She believes it can be demonstrated that the proposed equipment is economically advantageous at a 15%-per year return and a planning horizon of 5 years. Perform the replacement analysis using the annual worth method, a 5 -year study period, and the estimates below. Was Wilma correct? \table[[Equipment,Current,Proposed],[Original purchase price, $,-30,000,-42,000
Concurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, has recommended that a 2-year-old piece of precision measurement equipment be replaced immediately. She believes it can be demonstrated that the proposed equipment is economically advantageous at a 15%-per year return and a planning horizon of 5 years. Perform the replacement analysis using the annual worth method, a 5-year study period, and the estimates below. Was Wilma correct? Equipment Current Proposed Original purchase price, $ −30,000 −36,000 Current market value, $ 15,000 -- Remaining life, years 5 15 Estimated value in 5 years, $ 7,000 10,000 Salvage value after 15 years, $ -- 5,000 AOC, $ per year −7,000 −3,000   The AW of the defender is $−  and the AW of the challenger is $−  .   Wilma         (Click to select) is is not  correct.
Fiesta Foundry is considering a new furnace that will allow them to be more productive. Three alternative furnaces are under consideration. Perform an incremental analysis of these alternatives using the IRR method for each increment of cash flows. The MARR is 14% per year.

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Basics Of Engineering Economy

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